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Joining Pre-existing International Production Networks : Implications for India’s Economic Integration to East Asia

Author

Listed:
  • Jeongmeen Suh

    (Korea Institute for International Economic Policy (KIEP))

  • Jong Duk Kim

Abstract

This study provides a conceptual framework to explain what kinds of difficulties a late-follower will suffer from when it tries to join pre-existing International Production Networks (IPNs). We consider the total production cost minimization problem by a multinational company (MNC) in allocating locations of fragmented production processes across borders. From the clarification of IPNrelated costs, we draw out what structural disadvantages late-follower countries have and provide several policy implications to overcome these disadvantages with more targeted efforts. Especially we put India’s case in the conceptual framework of the IPNs and then look at the hurdles that make India’s participation in the East Asian IPNs hard and sluggish. Relevant data are provided in order to support the theoretical explanations.

Suggested Citation

  • Jeongmeen Suh & Jong Duk Kim, 2013. "Joining Pre-existing International Production Networks : Implications for India’s Economic Integration to East Asia," Microeconomics Working Papers 23434, East Asian Bureau of Economic Research.
  • Handle: RePEc:eab:microe:23434
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    File URL: http://www.eaber.org/node/23434
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    Keywords

    Multinational Corporations; International Production Networks; East Asia; India; Production cost advantage; analytical model of international production networks;

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

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